Brooklyn’s East New York neighborhood is the first spot to be targeted by the de Blasio administration’s affordable housing initiative. But area land prices, which have nearly tripled over the last year, could throw a wrench in the plan.
Development sites in East New York cost an average of $93 per square foot so far in 2014, up from $32 per square foot last year, according to Massey Knakal Realty Services data cited by the Wall Street Journal. In the first half of the year, over $42 million worth of transactions took place — up from $2.7 million last year.
Apartment building prices are on the rise as well, jumping to $155 per square foot from $143 per square foot last year.
The rising rates present the de Blasio administration with a conundrum. Should officials push too hard for below market-rate units, sites could sit vacant as developers who paid high prices wait out projects that would turn a profit, according to the Journal. On the other hand, handling the situation too gently would result in the community getting a lower number of affordable housing units than the administration promised.
“The administration is worried that if they do too much affordability, now everybody’s paid too much for the land and the development won’t be feasible,” Moses Gates, director of planning and community development at the Association for Neighborhood Housing Development, told the paper.
The same issue could confront the administration in the other 15 Brooklyn neighborhoods it is eyeing for affordable housing, as land prices across the borough continue to rise. [WSJ] — Julie Strickland